Economic crisis leaves Belarus unable to pay for Russian electricity
29 Jun, 2011 08:11
The supply of Russian electricity to Belarus has been cut off overnight Tuesday. Moscow wants Minsk to cover the standing $43 million debt before supply is resumed. But Belarus is short on money due to the ongoing economic crisis.
In a grim comment on the situation, Belarusian Economy Minister Nikolay Snopkov sadly joked on Wednesday that he is "sorry he didn't shoot himself" for his role in the crisis.The country had to devalue its national currency, which caused a buying spree among the population and left many shops with empty shelves. There were also mass protests by motorists after gasoline prices skyrocketed, which forced the government to intervene.Belarus is also short on hard currencies after its reserves depleted and export shrank. Local companies cannot buy foreign currencies in the market and make international payments. Wednesday's cut of electricity supply was caused by this very reason.Russian power monopoly Inter RAO UES threatened to restrict power exports to Belarus in early June due to a $53 million debt the country had at the time. After negotiation, the payment was agreed to be made in several tranches, the last of which is to be transferred on July 5.However the Belarusian power company Belenergo did not stick to the payment schedule and failed to deliver the second installment as agreed on June 20. The current debt is almost $43 million.The company has the money in Belarusian rubles, but cannot exchange it into anything they can pay with, which led to the cut of supply."As of 10pm Tuesday the payment didn't arrive. We confirm that on midnight Moscow time on June 29, we temporarily cut off all supply of power to Belarus. We expect the payment to arrive in a matter of days," a spokesman for Inter RAO UES told the media.Belarus says it will still cover the debt."Any self-respecting person and any self-respecting state pays its debts, and we will certainly pay ours," Minister Sipkov said, although he did not set any specific dates.Belenergo said it will take measures for Belarusian customers not to suffer from the loss of the Russian power and will cover it thanks to its own generating facilities. The contribution of Russian electricity to Belarusian consumption is about 12 per cent.